A hot air balloon caught fire and exploded over Egypt's ancient temple city of Luxor during a sunrise flight on Tuesday, killing up to 19 tourists, including Asians and Europeans, sources said.

The balloon carrying 21 people was flying at 300 metres (1,000 feet) when it caught fire, a security official said.

An employee at the company operating the balloon, Sky Cruise, said the pilot and one tourist survived by jumping out of the basket before it plunged to the ground. Both have been taken to hospital.

There were contradictory reports over the death toll and the nationalities of those killed in the crash.

An Egyptian security official said 19 tourists had died including nine from Hong Kong, four from Japan, three Britons and two French tourists. The source did not indicate the nationality of the 19th victim.

The health ministry said 14 people had died, and four were missing. It said three people were injured in the crash, including two Britons and one Egyptian.

The Japanese embassy in Cairo said it was trying to confirm the reports that four Japanese nationals died in the accident.

The British foreign office could not immediately confirm if any Britons had died in the crash.

"We are aware of reports (that Britons might be among the casualties). We are making inquiries," a foreign office spokesman said.

The French embassy was also trying to ascertain whether two French nationals had died in the crash, amid conflicting reports.

In Hong Kong, the general manager of a tour operator said nine Hong Kong people are feared dead.

"We believe that there is a high possibility that nine of our customers have died," Ng Do-wing of travel agency Kuoni which organised the Hong Kongers' tour told a news conference.

"This is terrible, just terrible," the Sky Cruise employee told AFP by telephone, declining to give her name. "We don't yet know what happened exactly or what went wrong," she said.

The balloon had been floating over the west bank of Luxor, one of Egypt's most renowned archaeological sites and home to the famous Valley of the Kings and the grand Temple of Hatshepsut.

In 2009, 13 foreign tourists were injured when their hot air balloon hit a phone mast and crashed at Luxor. Sources at the time said the balloon was overcrowded.

The crash comes amid widespread anger over safety standards in Egypt following several deadly transport and construction accidents.